Louisiana Medicaid program spending $400M under projections

Louisiana’s Medicaid program will spend about $400 million less than expected in the nearly ended budget year, largely because tens of thousands of people were booted from Medicaid rolls amid bolstered computer checks of eligibility.

The latest Medicaid forecast for the budget year that ends June 30 showed the program was expected to spend about $12 billion on the government-financed insurance coverage this year, rather than the $12.4 billion allocated for health services.

Nearly all the money Louisiana won’t spend is federal financing that simply won’t be drawn down from Washington, said the Louisiana Department of Health’s chief financial officer Cindy Rives. The small general state tax dollar savings already was taken by lawmakers and spent elsewhere in the just-ended legislative session.

The less-than-expected spending mainly stems from more frequent checks of whether people enrolled in Medicaid earn too much to qualify for the coverage, Rives said.

The health department has begun using an upgraded computer system that does quarterly eligibility checks, rather than previously performed annual checks, and uses more wage data for comparison.

More than 30,000 people lost their Medicaid coverage at the end of March after the first use of the upgraded system, and more are threatened with removal from the program later this month if they can’t prove their eligibility.

Nearly 1.6 million people, one-third of Louisiana’s residents, are enrolled in Medicaid. But the number of people receiving the taxpayer-financed health insurance coverage has fallen by more than 80,000 since January, according to health department data.

About 50,000 of those exiting the coverage were non-elderly adults enrolled in Medicaid through the expansion program enacted by Democratic Gov. John Bel Edwards in 2016. The latest Medicaid forecast report shows 450,000 people in the expansion program.

Rives said it’s unclear if the decline in enrollment — or the smaller-than-expected level of spending on health services — will continue or be a short-term anomaly.

“To say that’s an ongoing trend, I don’t have the data to support that,” she said.

Health department leaders say some people enrolled through Medicaid expansion likely have fluctuating or seasonal changes in employment that could keep them going in and out of the Medicaid program throughout the year, as their wages change.

“We don’t know what the churn is going to be, which people are going to come back, and only time will tell,” Rives said.

The budget for the financial year that begins July 1 includes expectations that spending on Medicaid services will grow to $12.6 billion. A final tally of this year’s spending won’t be complete until October.

Under Medicaid expansion, adults ages 19 to 64 with incomes up to 138 percent of the federal poverty level — about $16,750 for a single adult or $28,680 for a family of three — are eligible for the coverage. The federal government pays most of the cost. Louisiana is paying a share that eventually increases to 10 percent, but lawmakers passed financing tools to help cover the state’s share, including a tax hike charged on health maintenance organizations.

Republican officials and Louisiana’s legislative auditor have raised concerns that the Medicaid program has wasted millions on people who shouldn’t be receiving the coverage. The Edwards administration says the computer system upgrade addresses those concerns.